Standard and Poor’s Assigns “A” Rating to Bridgeport Housing Authority

Bridgeport Housing Authority received an “A” rating from Standard and Poor’s Ratings Service which identified the agency’s outlook as “good”. The rating is a reflection of strengths identified by Standard and Poor’s including high demand for its services, its strong financial situation and senior management team.

In explaining its rating of the authority, Standard and Poor’s stated the agency’s management team has the ability and experience needed to balance the agency needs of creating new developments and maintaining its current developments. The ratings agency believes the housing authority’s development fund contains enough money ($13.9 million) to maintain its liquidity as it seeks to leverage its existing resources to communities containing its properties. Standard and Poor’s the agency must leverage and diversify its resources if it wants to maintain its rating. Standard and Poor’s expects the agency to create alternative revenue sources through its leveraging efforts.

Home Builders’ Association to Spend Big Money on Lobbying

The National Association of Home Builders (NAHB) plans to continue its lobbying expenses in 2009 according to its Chief Executive Officer, Jerry Howard, in an interview with the National Journal Magazine.

NAHB spent at least $3.8 million in 2008 from January to September which his higher than the 2007 total of $3.22 million. In the interview Howard said housing must be fixed first to correct the problems in the larger economy.

“When people are losing their home values, they will be less likely to go out and buy a car,” he told the magazine. “So from our perspective if the new administration and new Congress want to fix the economy and get America back to work, they need to fix housing.”

NAHB has joined 600 other organizations to support a lobbying campaign, Fix Housing First, which is designed to get Congress and the administration to address the current housing crisis with recommendations which include:

1. Creating a creditable foreclosure prevention plan that can include allowing judges to set lower mortgage rates;
2. Enhance the Homebuyer Tax Credit; and,
3. Create below market 30-year fixed rate mortgages.

Interesting Reads

Economic Stimulus Bill May Not Be Ready on Jan. 20
By Shailagh Murray
The Washington Post

What if You’re Landlord Faces Foreclosure?
By J.W. Elphinstone
Associated Press

Governors Call for $1 Trillion Stimulus to Offset Budget Cuts
By Robin Shulman
The Washington Post

Boerum Hill Journal
A Block That Wanted Development Has to Wait
By Christine Haughney
The New York Times

Homelessness Official Wins Praise With Focus on Permanent Housing
Detractors Cite Mangano's Frequent Travel, Including Trips Abroad
By Derek Kravitz
The Washington Post

Conservative Successes: Some domestic policy achievements to be proud of.
by Matthew Continetti
The Weekly Standard

London's Mayor Issues a Challenge to Gordon Brown
By Matthew Kaminski
The Wall Street Journal

Read more »

Mayors Release Latest report on “Ready to Go” Jobs and Infrastructure Projects; Other Groups Call for Stimulus Funds

The United States Conference of Mayors (USCM) released its third report on a list of ready-to-go jobs and infrastructure projects which it says will help to jumpstart the economy once President-elect Barack Obama and Congress make stimulus funds available.

The report claims in 641 cities of all sizes there are 15,221 local infrastructure projects representing a $96.6 billion investment which will produce 1.2 million jobs in 2009 and 2010. The report includes a summary of the types of projects entailed in these sectors. The mayors’ claim the projects cited in this report does not adequately reflect the true potential impact of the stimulus on local projects and job creation since the list is compiled from “only” 642 cities. The US Conference of Mayors represents 1,200 cities with populations over 30,000. By contrast, the National League of Cities (NLC) represents, either directly or indirectly, more than 19,000 cities, towns and villages of all sizes. The report is the latest installment of the Mayors’ Main Street Economic Recovery plan. The plan calls for investments in 10 sectors:

1. Community development block grants (CDBG) for infrastructure;
2. Energy block grants for infrastructure and green jobs;
3. Transit equipment and infrastructure;
4. City streets/metro roads infrastructure;
5. Airport technology and infrastructure;
6. Amtrak infrastructure;
7. Water and wastewater infrastructure;
8. School modernization;
9. Public housing modernization; and,
10. Public safety jobs and technology.

The mayors are one of a number of groups calling for increased spending for local initiatives. The National Low Income Housing Coalition (NLIHC) is seeking $23.6 billion to provide assistance to 800,000 people and create over 200,000 new jobs. NLIHC is seeking funding for building or rehabilitation of 100,000 rental homes for extremely low income households; they seek to add 40,000 new vouchers; provide an additional $2 billion to the Department of Housing and Urban Development’s (HUD) Emergency Shelter Grant (ESG) program for homeless prevention; and, the organization seeks an additional $8 billion for the renovation and greening of public and assisted housing.

A coalition of organizations entitled the National Foreclosure Prevention and Neighborhood Stabilization Task Force sent a letter to Congress in mid-December calling for an additional $5 billion in funding for neighborhood stabilization. The group seeks these funds to supplement the $3.9 billion Congress appropriated as part of the Housing and Economic Recovery Act (HERA) for the Neighborhood Stabilization Program (NSP).

According to the task force, these funds will only assist less than 100,000 homes nationally which his is less than 10 percent of the one million homes projected to be vacant by the end of 2008. In its letter, the task force claims “many communities are expected to run out of NSP funds shortly after the monies are made available to localities in February 2009”.

The group estimates the additional funding will assist over 125,000 properties which will be purchased and rehabilitated. According to the group, those properties will:

• Create in excess of 100,000 jobs;
• Pay in excess of $210 million in property taxes annually;
• Generate an additional $10.7 billion in economic activity nationwide; and
• Save localities nearly $1.3 billion in costs ranging from trash removal, grass cutting, and boarding up vacant properties to more serious problems of vandalism, increased property and personal crime rates and arson.

The groups also call for a five percent set-aside for capacity building for local community development corporations, community land trusts, housing authorities and other nonprofits that are implementing the stabilization activities. They also call for funds to be set-aside to create a risk capital fund to allow local communities to level NSP funds.

These are the members of the National Neighborhood Stabilization Foreclosure Prevention Task Force which signed on to the letter:

ACORN
Center for American Progress Action Fund
Citizens’ Housing and Planning Association
Enterprise Community Partners, Inc.
Habitat for Humanity International
Housing Assistance Council
Local Initiatives Support Corporation
Low Income Investment fund
Mercy Housing, Inc.
National Alliance of Community Economic Development Associations
National Association of Affordable Housing Lenders
National Coalition for Asian Pacific American Community Development
National Community Land Trust Network
National Council of La Raza
National Housing Conference
National League of Cities
National NeighborWorks Association
National Vacant Properties Campaign
NCB Capital Impact
New Jersey Community Capital
Non-Profit Housing Association of Northern California
PolicyLink
Self-Help
Wisconsin Partnership for Housing Development, Inc.

Interesting Read

Silver Lining of Subprime Slips Away in Calif. Suburb
By Karl Vick
The Washington Post

Firms Charge Thousands to Modify Mortgages
Nonprofits Offer Service For Free, Advocates Say
By Renae Merle
The Washington Post

Homebuilders Will Start '09 with "Guns Blazing"
National Journal Magazine

Census Estimates Show Clout Again Likely to Go West and South
By Michael Teitelbaum
Congressional Quarterly

Read more »

HUD Nominee Faces Challenges

Shaun Donovan’s selection as the Secretary-Designate for the Department of Housing and Urban Development (HUD) was met with praise from a number of advocates for affordable housing but many challenges lay ahead for the secretary-designate.

The National Association of Housing and Redevelopment Officials (NAHRO) called Donovan’s selection “an asset at HUD”. According to NAHRO Executive Director Saul N. Ramirez, Jr said Donovan “is an outstanding choice to lead HUD" and contains the “abilities and experience will allow him to bring about responsible change in a difficult time."

Sheila Crowley, President of the National Low Income Housing Coalition (NLIHC) called his selection a “brilliant choice for HUD”. She said Donovan “enjoys high regard across the spectrum of housing interests, from low income housing and homeless advocates, public officials, developers, and financiers alike.”

Zunia Zaterman, Executive Director of the Council of Large Public Housing Authorities (CLPHA) called Donovan’s selection an “excellent pick for HUD”. Michael Kelly, Executive Director of the Washington DC Housing Authority (DCHA), said Donovan “has experience in full spectrum of issues and enjoys the support of the public housing community.”

Conrad Egan, President and CEO of the National Housing Conference (NHC), said, “Without question, Shaun will restore and elevate HUD to the principal domestic agency that advances the preservation and production of affordable homes and the vital development of communities.” Donovan is a trustee of NHC.

John A. Courson, Chief Operating Officer of the Mortgage Bankers Association (MBA) said Donovan’s “work in the private, non-profit and academic sectors gives him a unique perspective on the current turmoil in the housing market and he has been widely hailed during his time as New York City’s Housing Commissioner. We look forward to working with him to solve the ongoing crisis in the U.S. housing market.”

This range of support is going to be critical as Donovan, assuming he is confirmed as HUD Secretary, takes the helm of a department which has faces a number of challenges in the near future. Here is a list of some of the principal challenges facing the new secretary:

HUD structure: President-elect Barack Obama is calling on HUD to take the lead in solving the current housing crisis. But HUD’s structure needs to be reevaluated before it can effectively address the mortgage crisis and lack of affordable rental housing. Many recipients of HUD dollars consider the department to be too rigid in its rules, lacking muscle to secure the resources grant recipients need to administer its programs and facing retirement from a number of key staff resulting in a “brain drain” of institutional experience.

The department needs to be streamlined with more decision-making authority delegated to regional offices. HUD should follow the lead of Health and Human Services (HHS) Secretary-Designate Tom Daschle has expressed a desire to restructure HHS similar to the structure of the Federal Reserve Board. The department is not structured to react quickly enough to address local needs. The current economic crisis offers the ideal opportunity to radically change the structure of the department with an emphasis on delegating authorities to the regions, reducing regulation and allowing for greater local flexibility by housing providers to respond to local needs.

Affordable Housing Finance magazine has drafted a white paper entitled, Unfinished Business: What President-Elect Obama Must Know About Housing and HUD, which includes a recommendation for the new secretary to hold a “national conversation” in the form of public hearings. The paper calls for these hearings to explore a variety of issues including the notion that homeownership should be the de facto housing policy of this country; housing and transit should be better integrated; infrastructure needs must be addressed; and housing and health care for the aged should be integrated as well. This makes sense and should form the foundation for a newly structured department.

Access to, and funding for, affordable housing: The mortgage crisis has been well publicized; however, its impact on low income renters has received very little attention. The federal government has focused so much attention on helping homeowners in distressed it has failed to offer assistance to renters. While Congress has held hearings on the matter, Fannie Mae and Freddie Mac’s contribution to the mortgage crisis eliminated money for the National Housing Trust Fund which would have created badly needed resources to build affordable housing for people with the fewest resources to pay for adequate housing. The new secretary is going to need to find a way to ensure there are resources to develop affordable housing for those most in need. This will require increased funding for HUD programs particularly for public housing, vouchers, and new construction.

Increased funding for HOPE VI could be the vehicle to jump start production of affordable housing while also revitalizing distressed communities. Low-income housing advocates are adamant in ensuring changes to the current program. They want to ensure tenants have a right to return to the new units and that the one-for-one replacement rule is reinstated. The new secretary will need to balance the desires of both entities while acknowledging the need to ensure mixed financed deals are financially viable. Greater incentives must be provided to the private sector for developing multi-family units. Without private sector involvement, there simply will not be enough resources for more affordable housing units.

Deregulation: This is an issue which causes advocates and housing administrators, particularly public housing authorities, a great deal of angst. The Public Housing Authorities Directors Association (PHADA) has been the most aggressive in seeking deregulation of small housing authorities (agencies with fewer than 500 units). The report, completed by TCG International LL which was under contract with the IBM Business Consulting Services, stated among its recommendations that the risk of problems with small housing authorities was minimal compared to the burden of monitoring these agencies.

Regional approach to housing and community development: The Housing Finance Magazine white paper endorses an approach favored by the Brookings Institute in calling for a regional approach to solving the housing problems in the country. There is hope that the White House Office of Metropolitan Policy will support funding for regional approaches to solving the housing and community development challenges in the country. It will be fascinating to watch this issue develop. Local governments and housing authorities will resist this. There are tons of questions which must be resolved before implementation of this type of initiative can be tried.

For housing and community development initiatives to be successful all interested parties must think outside of the box. This may include agreeing to policy approaches which drew opposition in the past. Given the current housing crisis, the department will be forced to produce in a more substantive way than it ever has. For the secretary-designate, this is a double-edged sword. The department will either meet the challenges it must face or it will demonstrate it is ill-equip to handle its basic responsibility. The new secretary-designate seems to have the support of President-elect Obama which seems different from past administrations.

Interesting Reads

Stimulus

States, cities spar over stimulus money
By Stephen C. Fehr,
Stateline.org Staff Writer

States Squeeze Cities, Spreading the Economic Pain
Recession Hits Both Levels of Government, but Some Local Bodies Push Back and Take Fight over Funds to the Courts
By Connor Dougherty and Amy Merrick
The Wall Street Journal

Housing

White House Philosophy Stoked Mortgage Bonfire
By Jo Becker, Sheryl Gay Stolberg and Stephen Labaton
The New York Times

White Paper Defines Viability of Affordable Projects
Affordable housing market analysts adopt guidelines on determining market and project demand fundamentals.
By Chris Wood

Views Diverge on How To Recast Fannie, Freddie
By Zachary A. Goldfarb
The Washington Post

In Downturn, Build Up Stock of Affordable Rental Housing
By Roger K. Lewis
The Washington Post

Cool Is the Rule When HUD Is in the House
By Joe Davidson
The Washington Post

Moving On Out: Apartments See Renters Flee in Fourth Quarter
By Les Shaver
Multifamily Executive News Service

Tax Break May Have Helped Cause Housing Bubble
By Vikas Bajaj and David Leonhardt
The New York Times

When foreclosure limbo becomes a lifestyle
Like millions in U.S., Florida woman lives with housing uncertainty
By Mike Stuckey
Senior news editor
msnbc.com

U.S. homes lose $2 trillion in value in '08
Home prices have been hit hard, yet there is still no end in sight to the foreclosure crisis, according to Zillow.com.
By Les Christie, CNNMoney.com staff writer

HUD Chief Calls Aid on Mortgages A Failure
By Dina Elboghdady
The Washington Post

Homelessness

USCM homelessness/hunger survey shows continuing increase in need
American City and County Magazine

Read more »

Donovan Chosen as HUD Secretary: Reports Say Bronx Borough President to Head White House Office

Shaun Donovan, the current Commissioner of New York City’s Office of Housing Preservation and Development (HPD), has been nominated to be the next secretary of the Department of Housing and Urban Development (HUD).

HPD is the largest municipal developer of affordable housing in the nation. Since 1987, HPD has provided over $6.3 billion to support the repair, rehabilitation and new construction of hundreds of thousands of units of housing. HPD protects the existing housing stock and expands housing options for New Yorkers as it strives to improve the availability, affordability, and quality of housing in New York City. HPD has made a decisive shift away from City ownership of properties and has developed innovative community revitalization initiatives that promote private investment and productive public-private partnerships. HPD works with its governmental, community; non-profit and for-profit partners to strengthen neighborhoods increase the availability of well-maintained, affordable housing and enable more New Yorkers to become homeowners.

In his current position, Donovan is credited with helping to develop the city’s Acquisition Fund which combines public and private funds to encourage developers to include more affordable housing in their buildings. He went to HPD in 2004 after serving in HUD as part of the Clinton Administration where he was the Commissioner for the Federal Housing Administration (FHA) and headed the department’s multifamily office.

An architect, Donovan is expected to lead the efforts to restore some sanity to the current housing crisis. Obama is calling for a “bold plan that will dramatically increase the number of families who can stay in their homes. But this plan will only work with a comprehensive, coordinated federal effort to make it a reality,” he said in announcing Donovan’s appointment on You Tube.

One of Donovan's primary tasks will be to shore the FHA’s financial situation and seek to secure increased funding for HUD programs particularly public housing and the voucher programs.
Donovan is certainly highly regarded. He has been universally praised for his intellect, knowledge of issues and ability. As far as New York Mayor Michael Bloomberg is concerned, Donovan “walks on water” for his success in running HPD. Sheila Crowley, president of the Washington, DC-based National Low Income Housing Coalition, is quoted as saying Donovan “is a brilliant choice” and someone who is "highly regarded across the spectrum of those interested in affordable housing".

Donovan is 42 and has an undergraduate and graduate degree from Harvard University. He has also studied public administration at the Kennedy School of Government and architecture at the Graduate School of Design at Harvard.

Obama is also expected to appoint Bronx Borough President Adolfo Carrion as the director of a soon to be created White House Office of Urban Policy. This is according to various newspapers in New York City. Carrion was considered to be one of individuals under consideration for HUD secretary. If true, Carrion’s appointment would be a surprise to many in Washington who expected Bruce Katz, currently Vice President and Director of the Metropolitan Policy Program at the Brookings Institute. Katz, along with former HUD Secretary Henry Cisnero, wrote a paper which recommended the creation of this office. (See the December 8 posting). Carrion has an urban planning degree and worked for a period of time in the New York City planning department’s Bronx office. Carrion is also president of the National Association of Latino Elected and Appointed Officials (NALEO).

Interesting Read

New York Housing Chief Is Chosen for Cabinet
By Jackie Calmes
The New York Times

Foreclosures a Fair Housing Problem
By Bendix Anderson
Affordable Housing Finance Magazine

Internal Warnings Sounded on Loans at Fannie, Freddie
Executives Were Told of Subprime Risk
By Zachary A. Goldfarb
The Washington Post

Foreclosure Epidemic Infecting Rental Market
Tenants, Lenders Are Exposed to Various Scams
By Nick Miroff
The Washington Post

New York City Growing More Diverse, Census Finds
By Sam Roberts
The New York Times

Kimball Hill Shuts Its Doors
By Jerry Ascierto
Affordable Housing Finance

Read more »

New Publication Calls for Increased Role for HUD

A new publication to be released in January calls on President-Elect Barack Obama to create a White House Office on Metropolitan Policy and an increased commitment to housing within his first 100 days in office.

The publication, Change for America: A Progressive Blueprint for the 44th President is being published by the Center for American Progress. The group was founded by John Podesta who is serving as head of Obama’s transition team. The book includes a chapter on the Department of Housing and Urban Development (HUD). The chapter’s authors, former HUD Secretary Henry Cisneros and his former Chief of Staff Bruce Katz, call HUD a “legacy government – an overly compartmentalized agency administering programs and policies more suited to an earlier era, with information systems that impede rather than facilitate customer service and accountability.”

The authors suggest the new HUD Secretary focus on four key tasks in his/her first 100 days in office. They are:

1. Recruit the “best and the brightest” to work at HUD particularly for the positions of deputy secretary; assistant secretary for housing/FHA, public and Indian housing, fair housing and equal opportunity, and community planning and development;
2. Respond aggressively to finally address the mortgage crisis and restoring the Gulf Coast destroyed by Hurricane Katrina;
3. Aggressively establish budget priorities in fiscal years 2009 and 2010; and,
4. Establish a White House Office of Metropolitan Policy.

They argue HUD has not been a central player in the mortgage crisis. To address the mortgage crisis they argue that the new president should create a mortgage-crisis working group headed by the secretaries of HUD and Treasury to review all actions related to the current financial situation. They argue this group should offer a series of recommendations in three areas: regulatory and counseling; restoring the positive role of FHA, and recommending actions to address the fallout from the foreclosures. Second, they feel correcting the situation in the Gulf Coast is a major issue the HUD secretary should address.

They call for the HUD Secretary to submit an aggressive budget which includes 100,000 additional vouchers, creating a new $500 million grant program to preserve older assisted housing, restore funding for the HOPE VI, CDBG, public housing programs, and create an Office of Sustainable Housing to align housing policy with the goals of climate change and energy security.

The White House Office of Metropolitan Policy is envisioned to facilitate local collaboration in areas such as economic and workforce development, transportation, energy and housing. The paper calls for this office to design and implement “a new performance partnership with metropolitan areas.” The authors envision this office working closely with the heads of the departments of HUD, EPA, Transportation, Labor, Commerce, treasury and Education.

Obama has stated he will create an Office of Urban Affairs in the White House. There is speculation Katz will be named director of that office.

Interesting Reads

New Ridership Record Shows U.S. Still Lured to Mass Transit
By Lena H. Sun
The Washington Post

Modifying the Mortgage Giants
Fannie, Freddie Tilt From Profit Goals Toward Public Mission to Buoy Market
By Zachary A. Goldfarb
The Washington Post

Raines Says Company's Woes Not of His Making
By Zachary A. Goldfarb
The Washington Post

Building on Broken Promises
D.C. Developer's Projects Marred by Unchecked Spending and Dubious Deals
By Debbie Cenziper
The Washington Post

Report Links State Gun Laws to Rates of Slayings, Trafficking
By Cheryl W. Thompson
The Washington Post

Home Loan Troubles Break Records Again
By Alan Zibel
The Associated Press

Feud Between City Agencies Delays Moderate-Cost Housing
By Manny Fernandez and Charles V. Bagli
The New York Times

FHA Insurance Fund Has Fallen 39 Percent
By Dina ElBoghdady
The Washington Post

Haste Could Make Waste on Stimulus, States Say
By Lori Montgomery and Michael D. Shear
The Washington Post

Sen. Martinez Won’t Seek Re-Election in 2010

States Want $176 Billion Slice of Stimulus
Governors to Ask Obama to Set Aside Federal Funds to Boost Local Economies
By Ceci Connolly
The Washington Post

Protesters Call for Affordable Housing
Hundreds in City Said to Need Help
By David Betancourt
The Washington Post

Building Slowdown Turns Grand Visions Into Vapor
By Paul Schwartzman and Dana Hedgpeth
The Washington Post

Bush administration ignored clear warnings
Under pressure from banking industry, U.S. government eased lending rules
Associated Press

Read more »